Core Viewpoint - Bridgeline Digital, Inc. is set to release its financial results for the fourth quarter of fiscal 2025 on December 18, 2025, after market close [1] Company Announcement - The financial results will be announced by the President and CEO, Ari Kahn, and the CFO, Thomas Windhausen, during a live conference call scheduled for 4:30 p.m. on the same day [1]

Group 1: Company Performance - 1-800-FLOWERS.COM (FLWS) is a leading e-commerce provider of floral products and gifts, with a significant customer base and revenue. The Zacks Consensus Estimate for its current year earnings has been revised downward by almost 87.9% over the last 60 days [1] - Bridgeline Digital (BLIN) is a digital engagement company that offers a platform integrating Web Content Management, e-commerce, e-marketing, Social Media management, and Web Analytics. The Zacks Consensus Estimate for its current year earnings has been revised downward by almost 12% over the last 60 days [2] - Avita Medical (RCEL) is a regenerative medicine company focused on developing and commercializing a technology platform for point-of-care autologous skin restoration. The Zacks Consensus Estimate for its current year earnings has been revised downward by 6.5% over the last 60 days [3] Group 2: Market Sentiment - All three companies have been added to the Zacks Rank 5 (Strong Sell) List, indicating a negative market sentiment towards their current performance and future earnings potential [1][2][3]

Core Insights - Bridgeline Digital, Inc. has announced that its HawkSearch platform has been selected by a leading plastics and industrial supplier to pilot advanced AI-powered search capabilities [1] Group 1: Product Features - HawkSearch Unified Search integrates Concept, Image, and Keyword search to enhance product discovery through natural language and visual queries [1] - The suite of advanced capabilities includes Unified Search, Smart Response, and Conversational Search [1]

Core Insights - Bridgeline Digital, Inc. has announced that its product HawkSearch will enhance product discovery for a major architectural décor provider [1] Company Overview - Bridgeline Digital, Inc. is recognized as a leader in AI-powered marketing technology [1] Product Features - HawkSearch was selected due to its advanced capabilities, particularly its Visual Search functionality [1] - The Visual Search feature enables shoppers to find products based on visual attributes not typically captured in traditional data fields [1]

Core Insights - Bridgeline Digital, Inc. (NASDAQ:BLIN) provides digital engagement solutions aimed at optimizing online presence and enhancing customer engagement in a competitive landscape [1] Financial Performance - Bridgeline Digital's Return on Invested Capital (ROIC) is -21.51%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 7.83%, indicating insufficient returns to cover capital costs [2][6] - The ROIC to WACC ratio for Bridgeline Digital is -2.75, reflecting poor capital efficiency [2] Peer Comparison - Compared to peers, Bridgeline Digital performs better than Marin Software and Verb Technology, which have ROIC to WACC ratios of -12.84 and -7.51, respectively, suggesting better capital management [3][6] - Carver Bancorp, Inc. has the highest ROIC to WACC ratio of -0.05 among the group, despite a negative ROIC of -1.81%, indicating it is closer to breaking even in capital efficiency [4] - NeuroMetrix, Inc. faces significant challenges with a ROIC of -61.36% and a WACC of 12.56%, resulting in a ROIC to WACC ratio of -4.89, further emphasizing the difficulties in generating returns above capital costs [5][6]

Core Insights - HawkSearch has been integrated into Unilog's tech partner ecosystem, enhancing the CX1 eCommerce platform with advanced search capabilities [1] Company Summary - Bridgeline Digital, Inc. (NASDAQ:BLIN) is recognized as a leader in AI-powered marketing technology [1] - The HawkSearch platform offers advanced search, personalization, and product recommendations as an add-on solution [1] Industry Context - The integration of HawkSearch into Unilog's ecosystem signifies a growing trend in eCommerce towards utilizing advanced search and personalization technologies to improve customer experience [1]

Core Insights - Bridgeline Digital, Inc. has announced that its HawkSearch platform will be utilized by a global electrical distribution systems provider to enhance their careers portal [1] Group 1: Company Overview - Bridgeline Digital, Inc. is recognized as a leader in AI-powered marketing technology [1] - The HawkSearch platform is designed to deliver advanced search and filtering capabilities [1] Group 2: Industry Impact - The implementation of HawkSearch will facilitate job seekers in discovering opportunities across 10 countries [1] - The platform aims to provide an intuitive and streamlined search experience within the careers portal [1]

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) [Q3 FY2025 Financial Highlights](index=1&type=section&id=Q3%20FY2025%20Financial%20Highlights) Q3 FY2025 total revenue slightly decreased to $3.8 million, while subscription and licenses revenue grew 4% to $3.1 million, with core products showing 114% NRR and over 10% CAGR Q3 FY2025 Revenue Performance (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $3.8M | $3.9M | -2.6% | | Subscription & Licenses Revenue | $3.1M | $3.0M | +4.0% | | Services Revenue | $0.7M | $0.9M | -22.2% | - Revenue from Core products, including both subscription and services, grew by over **10% CAGR**[7](index=7&type=chunk) - Core product Net Revenue Retention (NRR) was **114%** for the quarter, indicating strong customer expansion and retention[7](index=7&type=chunk) [First 9 Months FY2025 Financial Highlights](index=1&type=section&id=First%209%20Months%20FY2025%20Financial%20Highlights) For the first nine months of FY2025, total revenue remained stable at $11.5 million, with subscription and licenses revenue increasing to $9.2 million First 9 Months FY2025 Revenue Performance (vs. First 9 Months FY2024) | Metric | 9M FY2025 | 9M FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $11.5M | $11.5M | 0% | | Subscription & Licenses Revenue | $9.2M | $9.1M | +1.1% | | Services Revenue | $2.3M | $2.4M | -4.2% | [Business Highlights](index=1&type=section&id=Business%20Highlights) Bridgeline accelerates customer acquisition through sales and marketing investments, securing new contracts, expanding customer relationships, enhancing AI products, and strengthening partner engagement [Sales Highlights](index=1&type=section&id=Sales%20Highlights) - The company is focusing resources from a recent capital raise on sales and marketing to accelerate new customer acquisitions[7](index=7&type=chunk) - In Q3, Bridgeline sold **16 new subscription contracts** with a total contract value of **$1.7 million**, adding over **$600,000 in Annual Recurring Revenue (ARR)**[7](index=7&type=chunk) - New contracts were signed with notable clients such as Venue Marketplace, Adentra, and Crest Fasteners[7](index=7&type=chunk) [Product Highlights](index=1&type=section&id=Product%20Highlights) - HawkSearch was ranked **1** in the 2025 Gartner® Critical Capabilities Report for the B2B Search Use Case, now accounting for over **60% of Bridgeline's revenue**[2](index=2&type=chunk)[7](index=7&type=chunk) - Introduced HawkSearch MCP (Model Context Protocol), enabling AI Agents to manage search through natural language prompts[7](index=7&type=chunk) - Launched AI Workbench and Advanced Analytics, allowing merchandisers to customize AI prompts without developer support and gain deeper visibility into search performance[7](index=7&type=chunk) [Partner Highlights](index=1&type=section&id=Partner%20Highlights) - Hosted the inaugural HawkSearch Virtual Summit, 'Insight25', which attracted **400 registrants** and featured guest speakers from BigCommerce, HP, and others[6](index=6&type=chunk)[8](index=8&type=chunk) - Co-hosted an exclusive partner event at B2B Online in Chicago with key ecosystem partners like Pimberly, BigCommerce, and Xngage[10](index=10&type=chunk) [Customer Highlights](index=2&type=section&id=Customer%20Highlights) - A Fortune 100 tech company signed a strategic retainer agreement to optimize global ecommerce search[9](index=9&type=chunk) - One of the nation's largest electrical distributors selected HawkSearch to power AI search across more than **seventy storefronts**[13](index=13&type=chunk) - A top five U.S. electrical distributor expanded its HawkSearch license to power **hundreds of ecommerce portals**[13](index=13&type=chunk) [Detailed Financial Results](index=3&type=section&id=Detailed%20Financial%20Results) [Financial Results – Third Quarter of Fiscal Year 2025](index=3&type=section&id=Financial%20Results%20%E2%80%93%20Third%20Quarter%20of%20Fiscal%20Year%202025) Q3 FY2025 total revenue slightly decreased to $3.8 million, gross margin contracted to 66%, and increased operating expenses resulted in a wider operating loss of $0.7 million and a net loss of $0.8 million Q3 FY2025 Income Statement Summary (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Total Revenue | $3.8M | $3.9M | | Gross Profit | $2.5M | $2.7M | | Gross Margin | 66% | 69% | | Operating Expenses | $3.2M | $3.1M | | Operating Loss | ($0.7M) | ($0.4M) | | Net Loss | ($0.8M) | ($0.3M) | - Subscription and licenses revenue constituted **81% of total revenue** for the quarter, up from 77% in the prior year period, indicating a continuing shift towards a subscription-based model[13](index=13&type=chunk) [Financial Results – First 9 Months of Fiscal Year 2025](index=3&type=section&id=Financial%20Results%20%E2%80%93%20First%209%20Months%20of%20Fiscal%20Year%202025) For the first nine months of FY2025, total revenue was flat at $11.5 million, gross margin declined to 67%, and increased operating expenses led to a wider operating loss of $1.9 million and a net loss of $2.2 million First 9 Months FY2025 Income Statement Summary (vs. First 9 Months FY2024) | Metric | 9M FY2025 | 9M FY2024 | | :--- | :--- | :--- | | Total Revenue | $11.5M | $11.5M | | Gross Profit | $7.7M | $7.8M | | Gross Margin | 67% | 68% | | Operating Expenses | $9.6M | $9.3M | | Operating Loss | ($1.9M) | ($1.5M) | | Net Loss | ($2.2M) | ($1.5M) | - Subscription and licenses revenue represented **80% of total revenue** for the nine-month period, compared to 79% in the same period last year[13](index=13&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $16.1 million, total liabilities $6.2 million, cash improved to $2.1 million, and total stockholders' equity was $9.9 million Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Sept 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,103 | $1,390 | | Total current assets | $4,085 | $2,947 | | Total assets | $16,148 | $15,602 | | Total current liabilities | $5,285 | $4,728 | | Total liabilities | $6,199 | $5,596 | | Total stockholders' equity | $9,949 | $10,006 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated statements show a net loss of $789,000 for Q3 2025 and $2,153,000 for the first nine months, resulting in basic and diluted EPS losses of $0.07 and $0.23 respectively Net Loss and EPS | Period | Net Loss | Basic & Diluted EPS | | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | ($789k) | ($0.07) | | Three Months Ended June 30, 2024 | ($305k) | ($0.03) | | **Nine Months Ended June 30, 2025** | ($2,153k) | ($0.23) | | Nine Months Ended June 30, 2024 | ($1,529k) | ($0.15) | [Reconciliation of GAAP to Non-GAAP Results](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) Non-GAAP Adjusted EBITDA was a loss of $330,000 for Q3 2025 and $762,000 for the nine-month period, with reconciliation adjusting for stock-based compensation, amortization, and restructuring charges Adjusted EBITDA Reconciliation Summary (in thousands) | Period | GAAP Net Loss | Adjusted EBITDA | | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | ($789) | ($330) | | Three Months Ended June 30, 2024 | ($305) | $3 | | **Nine Months Ended June 30, 2025** | ($2,153) | ($762) | | Nine Months Ended June 30, 2024 | ($1,529) | ($197) | [Other Information](index=4&type=section&id=Other%20Information) [Conference Call](index=4&type=section&id=Conference%20Call) Bridgeline Digital will host a conference call on August 14, 2025, at 4:30 p.m. ET to discuss Q3 FY2025 results, led by the CEO and CFO - A conference call to discuss Q3 2025 results is scheduled for **August 14, 2025, at 4:30 p.m. ET**[14](index=14&type=chunk) [Non-GAAP Financial Measures and Other Terms](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Other%20Terms) This section defines Non-GAAP Adjusted EBITDA as a supplemental performance metric and clarifies key terms like 'Core Product revenue' and 'Net Revenue Retention (NRR)' for investor context - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, and other specified non-cash or non-recurring items[17](index=17&type=chunk) - Core Product revenue includes all subscription license and services revenue from HawkSearch, specific WooRank licenses, and AccessiBe[20](index=20&type=chunk) - Net Revenue Retention (NRR) is defined as the current period's trailing twelve months Monthly Recurring Revenue (MRR), including cross-sales and net renewals, divided by the previous period's trailing twelve months MRR[20](index=20&type=chunk) [Safe Harbor for Forward-Looking Statements](index=5&type=section&id=Safe%20Harbor%20for%20Forward-Looking%20Statements) The report contains forward-looking statements based on current expectations, subject to risks and uncertainties as detailed under the Private Securities Litigation Reform Act of 1995 - The report contains forward-looking statements that are based on current expectations and are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially[21](index=21&type=chunk)

Core Viewpoint - Bridgeline Digital, Inc. reported a quarterly loss of $0.07 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.05, marking a significant earnings surprise of -40.00% [1] Financial Performance - The company posted revenues of $3.85 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.64% and down from $3.94 million a year ago [2] - Over the last four quarters, Bridgeline Digital has surpassed consensus EPS estimates only once [2] Stock Performance - Since the beginning of the year, Bridgeline Digital shares have lost approximately 2.5%, contrasting with the S&P 500's gain of 10% [3] - The current Zacks Rank for the stock is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $3.94 million, and for the current fiscal year, it is -$0.25 on revenues of $15.51 million [7] - The trend of estimate revisions for Bridgeline Digital was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Internet - Services industry, to which Bridgeline Digital belongs, is currently ranked in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $3.8 million, a decrease from $3.9 million in the prior year period [17] - Subscription license revenue was $3.1 million, up from $3.0 million in the prior year, accounting for 81% of total revenue [17][18] - Services revenue decreased to $700,000 from $900,000 in the prior year, representing 19% of total revenue [18] - Gross profit was $2.5 million with a gross profit margin of 66%, down from 72% in the prior year [18] - Net loss for the quarter was $800,000 compared to a net loss of $300,000 in the prior year [19] - Adjusted EBITDA was negative $330,000 compared to positive $3,000 in the prior year [19] Business Line Data and Key Metrics Changes - Core products now account for over 60% of total revenue, with double-digit growth from Hawk Search [6][15] - Hawk Search has a net revenue retention rate of 114%, indicating strong customer satisfaction and expansion [7][15] - Average initial contract for Hawk Search customers is $25,000 ARR, with additional features bringing total to $75,000 ARR [8] Market Data and Key Metrics Changes - Hawk Search was ranked as the number one B2B search software provider by Gartner [8] - The company added over 20 new customers and sold more than 30 licenses to existing customers [6] Company Strategy and Development Direction - The company is focusing on revenue growth, product innovation, and customer success [20] - Increased marketing budget from $250,000 to $500,000 per quarter to enhance lead generation [10][11] - The strategy includes leveraging partnerships and co-hosted events to generate leads more effectively [12] Management's Comments on Operating Environment and Future Outlook - Management expects Hawk Search to continue growing and positively impacting overall company growth by 2026 [15][55] - The company is in a favorable position within the B2B market and is capitalizing on advancements in AI technology [55] Other Important Information - As of June 30, 2025, the company had cash of over $2.1 million and total assets of $16.1 million [19][20] - Total liabilities were $6.2 million, with no significant debt obligations [20] Q&A Session Summary Question: How has your customer acquisition strategy evolved? - The company has shifted to investing two-thirds of its budget in known lead sources, focusing on campaigns that generate the best leads [25] Question: Where does your pipeline stand in regards to reaching new customers or expanding within existing customers? - Approximately 60% of sales have been to existing customers, indicating strong product value and customer retention [27] Question: Are you getting any customer feedback about the new technology enhancements? - Most product releases were driven by customer feedback, leading to innovations that meet customer needs [29] Question: Should we expect sales and marketing expenses to continue at the current level? - The company plans to maintain the increased marketing spend of $500,000 per quarter, as it is producing positive results [35] Question: What are competitors doing in response to Hawk Search's success? - Competitors are offering free professional services to compete, but this approach is not sustainable long-term [38][39] Question: Is there significant customer concentration within Hawk Search? - No single customer contributes 5% of revenues, indicating a diversified customer base [49]